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Learning about interval funds

Real estate interval funds are a type of mutual fund that is an increasingly popular option for people interested in alternative types of vehicles. California investors who are interested in commercial real estate should know the benefits and disadvantages of them.

Interval funds are appealing investment options because they allow retail investors to invest in institutional-grade real estate with a low investment minimums. Compared to other types of mutual funds, these investments, which can include private real estate equity, private real estate debt and commercial real estate credit, usually result in high returns.

One drawback of investing in interval funds is that investors are not allowed to cash in on a daily basis. They are generally limited to one redemption per quarter. However, the multiple advantages of the funds still attract investors, even with the limit on liquidating.

In addition to the access to institutional grade investments, requiring very low buy-ins and providing superior returns, interval funds also do not undergo instability when there are equity market fluctuations. This is due to their low associations with equities. They are not priced regularly, so any short-term volatility in the equity markets tend to not affect the value of interval funds. Another advantage of interval funds is that the time limitation on redemptions prevents investors from divesting prematurely.

Commercial real estate can present a profitable investment opportunity for individuals wanting to begin or expand their financial portfolio. However, it does require some working knowledge of the real estate market. An attorney who has experience with these matters can often review a piece of property that a client is interested in to see if any potential problems such as lease disputes are looming.

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